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Two of the characteristics of a perfectly competitive market are that there are a large number of firms and each firm produces a product that is identical to what the other firms produce. Good examples of perfect competition can be found in the agricultural sector, primarily because it is difficult to modify an agricultural commodity (e.g., corn, soybeans, wheat) to create a branded product.
1. Identify a market that you believe satisfies the requirements for perfect competition.
2. If you've noticed advertising for that product, is the advertising by an individual producer or an industry group? (If you've answered individual producer, you might want to go back to (1) and rethink whether the product is sold in a perfectly competitive market.)
3. Why doesn't it make economic sense for individual firms to advertise in a perfectly competitive market? Who would gain in the short run? Who would gain in the long run? Who would likely be worse off because of that advertising?
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Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..
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